Karen Watkin, CFA

We expect the opportunity set to widen for income investors in 2025, though less clarity around the second half requires a dynamic approach.

We think today’s market landscape calls for a different mix in multi-asset income strategies

We think US capital markets still offer plenty of potential for investors—especially those with the ability to reach across asset classes.

For multi-asset income investors, adapting portfolios for equity defense, credit potential and duration exposure should be on the docket for 2024.

An improved income outlook for multi-asset investors, including higher yields, sharply contrasts with cloudy conditions at 2023’s start.

Dividend investing should expand beyond traditional dividend-paying stocks to generate income effectively without giving up return potential in growth-led markets.

Multi-asset income strategies should feature high-dividend stocks, high-yield credit and global government bonds in 2023.

Global indicators continue to signal a sharp business recovery from last year's COVID-19 pandemic lows. While inflation expectations are increasing as a result, business improvements offer multi-asset investors good reasons to remain tilted to equities for the next stage of the recovery.

Having strongly underperformed the wider stock market in 2020, high-dividend stocks have shown early signs of a rebound in recent weeks.

Emerging-market (EM) asset returns substantially lagged their developed-market (DM) counterparts over the last decade. In 2020 so far, EM equity performance has been on par with DM equities. Are we at an inflection point?

Higher-income assets underperformed in the second-quarter rebound. But that also means there's pent-up potential in income-generating assets that may begin to show in later stages of the recovery.

In today's slow-growth and low-interest-rate environment, investors should look beyond a conventional equity and fixed-income solution to meet their income needs. Breaking traditional constraints requires maintaining an open mind to all income sources while keeping a clear eye on risk management. In this paper, we examine how to carefully diversify higher-yielding assets and dynamically manage an array of hazards to help income investors capture yield while minimizing drawdown risk. The key, in our view, is to unchain a portfolio from traditional constraints, by sourcing higher-yielding securities across asset classes and around the world.

The last decade produced great performance across most asset classes. But in the 2020s, we expect investment market returns will be lower and risk harder to manage. Looking forward, a disciplined multi-asset approach will be especially valuable to identify opportunities and help mitigate setbacks.

There are a lot of suggestions these days about where to get extra income, but less discussion about the cost attached to it. A diversified multi-asset approach can help-and provide additional growth potential. But how it's designed matters.

As the new year begins to unfold, the environment for risk assets is still benign: the global economy is strong, monetary policy is accommodative, and volatility is low and steady. At this point, we don't see excesses developing that could change that.